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Grain Prices Continue Downward Cycle; Pork Prices Rise

U.S. feedgrain supply and use projections for 2012/13 are unchanged this month, but prices for corn are lowered based on prices reported to date, according to the World Agricultural Supply and Demand Estimates report released today by the U.S. Department of Agriculture (USDA).

Dec 11, 2012

U.S. feedgrain supply and use projections for 2012/13 are unchanged this month, but prices for corn are lowered based on prices reported to date, according to the World Agricultural Supply and Demand Estimates report released today by the U.S. Department of Agriculture (USDA).

The season-average farm price for corn is lowered 20 cents to a range of $6.80 to $8.00/bu. Prices received by farmers through October remained well below cash market bids, and this year’s early corn harvest appears to have elevated early season marketings, placing further downward pressure on the outlook for the season-average price.

Globally, corn production for 2012/13 is raised 9.4 million tons; China corn output is up 8.0 million tons based on recent estimates from the National Bureau of Statistics. Corn production for Canada is raised 1.5 million tons and Russia corn production is raised 1.0 million tons.

Total U.S. oilseed production for 2012/13 is projected at 91.3 million tons, down slightly, while soybean crush is raised 10 million bushels to l.570 billion bushels due to strong foreign demand for soybean products. Soybean oil production is raised 460 million lb., while soybean oil exports at 1.8 billion lb. are up sharply from last month.

Prices for soybeans and products are all projected lower this month, with the season-average soybean price range for 2012/13 projected at $13.55 to $15.55/bu., down 35 cents on both ends of the range. The soybean meal price is projected at $440 to $470/ton, down $15 on both ends of the range.

Globally, oilseed production for 2012/13 is projected at 463 million tons, up 0.9 million tons from last month. Global soybean production is projected at 267.7 million tons, up 0.1 ton. Most of the gains in increased soybean exports are from Canada and increased peanut exports from India.

For 2013, red meat and poultry production is forecast as reduced from last month, led by lower pork production that more than offsets higher beef production.

Pork production forecasts are reduced from last month as first-quarter slaughter is expected to be slightly lower and carcass weights are reduced. USDA will release the Quarterly Hogs and Pigs report on Dec. 28, which will provide an indication of producer farrowing intentions for the first half of 2013.

For 2012, total meat production forecast is raised led by higher forecast fourth-quarter beef and broiler production. Hog slaughter and carcass weights in the fourth quarter are forecast lower than last month.

The hog price forecasts for both 2012 and 2013 are raised, led by forecasts of lower production.